The original idea behind this thread, a good trader said to me that the first retracement is the best trade. The first higher low/lower high. These retracements provide good opportunites to enter into a move with a relatively small stop loss. A hl/lh confirms a test and failure to follow through at a certain level.

Trades 1 and 3 are the turn trades, at key levels and price extremes (of the session). They are typically in and around the London open where stats show turns are likely. The London open head fake. Trade 2 is when a trend has been established.

1)Higher lows and lower highs at extremes from 5 min (also known as 1 2 3 tops/bottoms). I want to see supporting information from the 15 min chart and for the turn to be at a key level ie pivot, round number etc etc. Whilst some entries will be at the point 3 we do look to enter on the X.

Below is the 123 reversal when the price fails to make a lower low or higher high 1. trend line broken (I don't use TL's)2. lower high in an uptrend, or a higher low in a downtrend.3. break below the previous low in an uptrend, or above the previous high in a downtrend At point 3 the reversal is confirmed and everybody’s brother is getting in. A stop run often follows to re-test the penetration at point 3. Quicker traders may get short at the X.

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2)What I'll call 100% system trades that will follow the 1hr and 15 min candles with entry from 5 min higher lows and lower highs. I do not want to see an obvious contra indication from 15 min candles. I would like to be selling a 5 min lh after an engulfing negative close candle/shooting star with little/no lower wick on 15 min. I'll start showing more 15 min charts, see from page 37. A good example of not wanting to sell a lower high against wrong 15 min candles would be http://www.forexfactory.com/showpost...&postcount=793 on page 53 and again http://www.forexfactory.com/showpost...&postcount=856 page 58.

3)A 2b reversal trade which is a variation of the 123 top/bottom and is also an indication of a test and failure. I use some indi's on charts ONLY TO SPOT DIVERGENCE for the 2b trades.

"In an uptrend, if prices penetrate the previous high but fail to carry through and immediately drop below the previous high, the trend is apt to reverse. The converse is true for downtrends."[Vic Sperandeo in "Trader Vic: Methods of a Wall Street Master"]The 2B principle gets its power from the large number of stop-loss orders in the area of the X. Many traders who bought the breakout will have their stop-loss orders there, so if prices fall below the blue line those stops will be hit, driving prices back down with thrust. If you enter a short as the breakout traders are bailing out of their positions, the burst of selling can propel your trade into the green so quickly that, before you can enter your stop-loss order, prices have moved far enough in your favor to set your initial stop-loss at break even. The inverse is equally effective for 2B bottoms.Another name for the 2B is "spring." Imagine the blue line in the graphic as a rubber band. The bigger the poke above the blue line, the stronger the reversal potential if the breakout fails. This same principle works on failed triangle breakouts and failed trendline breakouts. If you were unfortunate and bought the breakout, instead of putting just a stop loss at the X, consider making it a stop-and-reverse. This pattern occurs at the tops and bottoms of consolidations as well as at major reversals.

I was unable to copy the picture from the website, see the charts here http://www.forexfactory.com/showpost...postcount=2077

GeneralThe London session, gu will regularly do 125 + pip ranges. Each time there is a stall and turn that extreme becomes the starting point potentially for the session move. This bigger move is more likely to happen after 9.30 gmt than before. Between 7 and 9 am gmt a decent range is around 50 pips, numbers show something like 70-80% of the time these are the London open head fake moves.

Some knowledge of candlestick analysis is required as you want to be trading the right candles. Consider key levels for turns (eg round numbers, D W and M pivots, some fibs, S/R areas), follow the 1hr for trade 2, are we above below 1hr 8 lwma, look at 15 min candles, 5 min hl/lh's. Once set up on 5 min price should move a pip or so beyond the high low of the set up candle to confirm the trade. The set up candle should have little/no wick in direction of trade eg if buying little/no upper wick.

Stops: Around 15 pips 1% of capital. Exits: Up to you. Please consider that Mrs V has been inducted into The 20 Pips Bank Hall of Fame and thats something I have to listen to all the time.

7-9 am gmt exits will be taken at key levels due to the small ranges in Frankies hour that typically exist and the inevitable LO head fake.

After 9 am gmt we will look for the FH/LO range to break. Once that has happened we will hope to benefit from longer moves. In and around LO a turn can happen quickly so we look for a decent 15 min candle. Early US moves can take 1-2 hours to come into play.

EXAMPLESThe 1 hr chart shows in general upper wick shooting stars basically you'd expect a fall. The arrow down shows the oversize shooting star the 10 am candle.5 min chart. The red line shows the close of the 1hr 10 am candle. To the left of the red line see the arrow down. Lower high at an extreme for session and with the previous 1hr upper wicks a decent trade, see 1 above. To the right of the red line are several clear lower highs in direction of trend, see 2 above. The gold line is the MTF ma to show the 1hr 8lwma on 5 min chart. Entries taken from doji's and candles with little/no lower wicks when selling.

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The first post is looking to find the trend for the day. Once price has moved around 100 pips eurusd and gbpusd can easily have good counter trend trade bounces off round numbers and pivots.

This morning gbpusd fell 100 pips to the central pivot, bounced, had a higher low just above 1.8500. I look for higher lows/lower highs off 5 and 1 min charts.

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Hopefully this will help. These charts are current so the following would have been trades.

Eurusd had a spinning top on 1hr 3 candles back so thats a good indication that the run up has stalled and an opportunity to look to sell.

The first lower high was on the 5 min chart 5 past the hour at 11,05 and a 2nd opportunity to sell was highlighted.

So whilst I'm not looking at every hourly candle to enter a new trade once in you'd be looking to trade each lower high/higher low until the run has ended. I would be looking at 1 hr candles that show a position contrary to the direction I am in.

Your first clue that the run has ended will usually be a higher low/lower high against the direction of the trade you are in from the 5 min chart.

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take a look at the next set up plz.the 12:00 hourly candle was bearish forming a LH so we should look for shorts in next hour.The next hour was all bullish but the 13:55 formed a LH and crossed the 5ema down. that was a big profit short but should we take it after such a bullish hourly candle?

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vantage, it will be great if you could post more examples.take a look at this trade. bullish hourly and HL crossing the 5ema on 5min.something wrong with his trade or a valid signal that got stopped?

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One of those do you don't you this morning.

The 4 am hourly candle was a positive close and there was a (not shown) higher low when the 6.05 5 min close. This was just a touch too early for me this am.

The 5 am had another higher positive close so the bias is buy. The 6.30 5 min candle closed just below the 5 ema. Flip a coin time do you , don't you. If you're going to take a chance I'd much rather take a chance going in the direction of the trend. For me the 1 min chart helped make a decision to buy.